Italy's Atlantia joins ACS to end $22 billion battle for Spain's Abertis

MILAN/ROME (Reuters) - Italy's Atlantia ATL.MI and Spanish builder ACS ACS.MC agreed a joint 18 billion euro ($22 billion) bid for Abertis ABE.MC on Wednesday, ending a five-month battle for the Spanish road-toll operator and easing political worries.

(L-R) Giovanni Castellucci, Atlantia Chief Executive Officer, Florentino Perez, chairman of Spanish builder ACS, and Marcelino Fernandez, chairman of ACS's German arm Hochtief, pose before a news conference in Madrid, Spain, March 15, 2018. REUTERS/Juan Medina

The Spanish government had been concerned that an Italian victory could leave some of the country's most important roads under full foreign control and the proposed joint bid, which will be made by ACS-controlled Hochtief HOTG.DE, ensures a strong Spanish influence over the future of Abertis.

Under the terms of the proposed deal Atlantia will own 50 percent plus one share in the entity which will ultimately own Abertis, plus an additional, indirect stake through a related purchase of around 25 percent interest in Hochtief.

Atlantia will consolidate Abertis in its balance sheet.

The Italian company will also have the option to buy from Abertis a stake of between 29.9 and 34 percent in Spanish telecom masts group Cellnex CLNX.MC, at a price between 21.2 and 21.5 euros per share, Atlantia said late on Wednesday.

ACS’s and Atlantia’s boards approved the agreement and the top executives will hold a joint press conference on Thursday.

“This is a cooperative approach that solves many issues,” one source close to the negotiations told Reuters.

Although the deal falls short of Atlantia’s initial ambitions of exercising full control over the world’s biggest transport-infrastructure group, the Rome-based company will still expand in Europe, in Latin America and enters new markets.

“We are excited by the opportunity to work with ACS in Abertis... and at the prospect of creating a global platform from which to enter countries such as the United States, Canada, Australia and Germany,” Atlantia CEO Giovanni Castellucci said.

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It is the first foray by ACS and Hochteif into motorway concessions and they will also benefit from a strong financial partner in Abertis.

Florentino Perez, ACS’s major investor and Real Madrid soccer club chairman, and the Benetton family, which controls Atlantia, had been wrangling over Abertis since October.

Perez and Castellucci led the talks to find a way out of the costly and risky bidding war, with a deal finally signed late on Tuesday in Madrid, the source said.


A group of banks including Credit Suisse CSGN.S, BNP Paribas BNPP.PA, JP Morgan JPM.N and Italy's UniCredit CRDI.MI have arranged a 14 billion euros financing package for the deal, two other sources said.

Atlantia and ACS said in separate statements that Hochtief would first launch an 18.2 billion euro cash bid for Abertis, before transferring it to a vehicle which will be 30 percent owned by ACS and almost 20 percent by Hochtief.

A shareholders pact and a long-term contract among the three groups will set governance rules.

Another source said the acquisition of Abertis would be done first through Hochtief to avoid loading ACS with too much debt.

Some newspapers have speculated that Atlantia and ACS could choose to break up the Abertis business in the future, but the statements on Wednesday made no mention of this possibility.

Lazard LAZ.N and JP Morgan advised ACS and Hochtief on the deal while Credit Suisse, Mediobanca MDBI.MI and Santander SAN.MC worked for Atlantia.

($1 = 0.8095 euros)

Additional reporting Andres Gonzalez and Jesus Aguado in Madrid, and Matthias Inverardi in Dusseldorf; Editing by Alexander Smith and Toby Chopra